By The Rio Times | Created at 2026-09-11 09:36:43 | Updated at 2026-09-11 10:59:31
1 hour ago
Argentina · Economy
Key Facts
—The headline. Argentina’s consumer prices rose 1.7% in August, the statistics agency INDEC reported on September 10 — the lowest monthly reading since June 2025 and the lowest for an August since 2017.
—The big picture. Annual inflation eased to 33.5%, and prices are up 21.3% so far this year. Core inflation, which strips out seasonal and regulated items, ran at 1.8%.
—On forecast. The print matched exactly the 1.7% median projection in the central bank’s REM survey of analysts.
—What rose most. Housing and utilities led with a 2.8% increase, followed by education at 2.5% and health at 2.4%. Food and non-alcoholic drinks rose 1.7% and contributed most to the monthly index.
—The celebration. The Economy Ministry declared it “the lowest inflation of the last 14 months,” and President Javier Milei cheered his economy minister: “¡Vamooo Toto!”
Argentina’s August inflation came in at 1.7% — a 14-month low that landed exactly on analysts’ forecast. The government is celebrating; skeptics are watching the peso, the reserves, and a year-end forecast still near 30%.
The Numbers Behind the Slowdown
The 1.7% monthly increase extends one of the most abrupt disinflations anywhere in the world. When Javier Milei took office in December 2023, monthly inflation was running above 25%. It has now spent most of 2026 between 1.5% and 2.5%, and August’s reading is the lowest since the 1.6% recorded in June 2025, according to INDEC data reported by La Nación and TN.
The composition matters as much as the headline. Seasonal goods actually fell 0.9% in the month, while regulated prices — utility and transport tariffs still adjusting to the removal of subsidies — rose 2.2%, Economy Minister Luis Caputo noted in a social media post. That leaves core inflation at 1.8%, slightly above the headline, a sign that the remaining pressure is concentrated in administered prices rather than in the broader economy.
By division, housing, water, electricity and fuels rose 2.8%, the fastest of any category, reflecting ongoing tariff catch-up. Education climbed 2.5% and health 2.4%. Food and non-alcoholic beverages rose 1.7%, in line with the general index — and, because food weighs heavily in Argentine household budgets, it was the largest single contributor to the monthly figure.
August was also the softest reading for that month since 2017 — before the currency crises of the Macri era and the triple-digit inflation that peaked under the previous government in early 2024.
A Government Victory Lap
The government moved within hours to claim the number. The Economy Ministry posted on X, in capital letters, that August delivered “LA INFLACIÓN MÁS BAJA DE LOS ÚLTIMOS 14 MESES” — the lowest inflation of the last 14 months. Milei amplified the message with a personal jab at his critics and praise for his economy minister: “¡Vamooo Toto!” he wrote, using Caputo’s nickname, Minutouno reported.
The print also landed on the consensus. The central bank’s REM survey had projected exactly 1.7% for August, so the figure surprised no one — which, in a country accustomed to inflation shocks, is itself news. The same survey’s median forecast sees inflation ending 2026 near 30% annually; the Top-10 group of forecasters puts it at 30.2%, while the Facimex consultancy projects 28.7%.
Markets had already been drifting in the government’s favor. Country risk, measured by the JPMorgan EMBI spread, fell below 500 basis points earlier this week to around 403 — its lowest since April 2018, Infobae reported — extending a rally in Argentine bonds.
What the Skeptics Are Watching
The critique of the disinflation is not about the index but about how it is being achieved. The peso’s official rate has crawled far more slowly than prices, and the outlet La Política Online warned this week that “el atraso cambiario se profundiza” — the exchange-rate lag is deepening — a gap many private economists believe will eventually force a sharper devaluation. The wholesale dollar traded near 1,510 pesos per dollar around the release, with Banco Nación quoting 1,485 to buy and 1,535 to sell.
Reserves are the second pressure point. The central bank managed net purchases of about US$127 million over the five sessions through mid-week — a welcome streak — but gross reserves stand near US$50.8 billion while net reserves, after deducting liabilities, are estimated around US$12 billion. Rebuilding that cushion while keeping the peso steady is the central bank’s defining challenge for the rest of the year.
The third is the exit from the current regime. With year-end inflation still projected near 30%, the disinflation is real but unfinished: tariffs continue to adjust, wage negotiations are reopening, and every month of exchange-rate lag raises the stakes of the eventual correction. August’s 1.7% shows the strategy is still delivering. The question that will define the coming quarters is what it costs to keep it going.
Frequently Asked Questions
What was Argentina’s inflation rate in August 2026?
Consumer prices rose 1.7% month over month, INDEC reported on September 10 — the lowest monthly reading since June 2025 (1.6%) and the lowest for an August since 2017. Annual inflation eased to 33.5%.
Which prices rose the most in August?
Housing and utilities led with 2.8%, followed by education (2.5%) and health (2.4%). Food and non-alcoholic beverages rose 1.7% and, given their weight in the index, contributed most to the monthly increase.
What do analysts expect for the rest of 2026?
The central bank’s REM survey projects annual inflation near 30% for 2026, with the Top-10 forecasters at 30.2% and Facimex at 28.7%. Analysts are watching the peso’s exchange-rate lag and the central bank’s thin net reserves as the main risks.
Sources: INDEC; TN; Infobae; La Nación; El País; Minutouno; La Política Online.
